Societe Generale Research likes short GBP/CHF and short NZD/JPY as best trades for August. SocGen is short NZD/JPY targeting a move towards 64.
"Short GBP/CHF for August. Our belief that we are set up for an illiquid, volatile August may yet backfire: No rules are set in stone in FX, but short NZD/JPY was our top directional pick for the month, and we initiated it formally yesterday on the trade tracking system. It's in decent shape. One trade which ticks the boxes for August is short GBP/CHF and Sterling has actually had a reasonably good July," SocGen notes.
"We prefer NZD/JPY shorts to AUD/JPY because they've done better on average over the last 20 years and because Australia's current account and budget balances cushion the economy. Australia may be seeing virus outbreaks, which require renewed closing down of bits of the economy, but the fiscal position means they can offset that, for longer than in other countries,' SocGen adds.